I have a subcontractor who will be working for my public sector client inside IR35.
The subcontractor wants to paid via his limited company, and we will consider his company a supplier and have a contract between us, even though he's considered an employee for tax and NI purposes. We understand that we must deduct NI and PAYE before paying him, and that his invoice demand and payment for same will not match, as tax etc is deducted.
Should he add VAT on his invoice? (my gut feel is no)
Or does his invoice (without VAT) become the equivalent of a timesheet submission - a confirmation of time worked? (gut feel yes!)
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